The oil pressure gauge on my 2007 Avalanche reads 0 and activates low oil pressure warning. Oil level is OK and engine does not sound like one with with no oil pressure; AKA no knocks or ticking

Did you try to reset it.

Could be the gauge on the dash. If you really had no oil pressure the engine would be very loud.
A mechanic would check oil pressure with a mechanical gauge to verify.

If oil level in engine is at proper level, I wouild suspect oil pressure sending unit, does vehicle have an oil psi gauge on dash,,,if so what does it read. if oil psi reads well then it may be an oil level sensor. if you have access to a manual oil pressure gauge, you can remove the oil psi sensor and install manual gauge to get a true reading of what oil pressure is while running. if manual gauges shows low psi, then you may be looking at an oil pump.

DW Mylin

see this tips and fix it. God bless you
The oil pump supplies oil to lubricate your engine. If the oil pump is worn or is not turning, the engine will suffer a loss of oil pressure, which may result in engine damage or engine failure.
The first sign of trouble may be a low oil pressure warning light, a drop in the normal reading on you oil pressure gauge (if your car has one), or the appearance of ticking or clattering sounds from your engine.
As a rule, most engines only need about 10 PSI of oil pressure for every 1,000 RPM of engine speed. Oil pressure will read higher than normal when a cold engine is first started because the oil is thick. Oil pressure will gradually drop as the engine warms up and the oil thins out. So normal oil pressure on a warm engine cruising down the highway is typically 30 PSI up to 45 PSI.
SYMPTOMS OF OIL PUMP TROUBLE
The first thing you should do if any of these symptoms occur is to stop your car, turn off the engine, let it sit for a few minutes, then check the oil level on the dipstick. If the oil level is at or below the ADD line, add a quart of oil to bring the level back up to the full mark. Add as much oil as is needed to raise the level to the full mark. Then restart the engine. If the warning light remains on, or the oil pressure reading does not climb back up to its normal range, or the engine noise does not go away, you may have a bad oil pump.
The other possibilities include a bad oil pressure sending unit, or a problem with the oil pressure warning light circuit or oil pressure gauge.
OIL PRESSURE SENDING UNIT
If the engine is NOT making any unusual noises and seems to be running normally, and the oil level on the dipstick is FULL, but you are still getting a low oil pressure warning light or low gauge reading, the fault could be a bad oil pressure sending unit.
The oil pressure sending unit is mounted on the engine block. On some applications, there is a spring-loaded pressure-sensitive diaphragm with a switch inside the sending unit. This switch completes the circuit to the low oil pressure warning light if oil pressure drops below a certain threshold. The unit may stop working if the diaphragm inside fails, if the switch is stuck, if the small hole that allows oil to enter the sending unit becomes plugged, if there is a loose, corroded or broken wiring connector at the sending unit, or there is a fault in the wiring circuit between the sending unit and warming light.
On vehicles that have an oil pressure gauge (electronic, not mechanical), the oil pressure sending unit has a small rheostat inside that sends a variable voltage signal to the oil pressure gauge when the diaphragm moves. A worn spot on the rheostat or any of the other problems just described for the simple pressure-type oil pressure switches can cause a problem.
FORD'S FAKE OIL PRESSURE GAUGE
On many Ford vehicles that were built from 1980 through the 1990s, the oil pressure sending unit has two switches, a low pressure and a high pressure. These vehicles also have an oil pressure gauge, but the reading on the gauge is not a true indication of real oil pressure. As long as the pressure to the sending unit is between high and low, the gauge will read normal. If oil pressure drops and trips the low pressure switch, the dash gauge will now read low. Or, if oil pressure goes up and trips the high switch inside the sending unit, the dash gauge will read high. Consequently, don't rely on the oil pressure gauge for an accurate reading in these vehicles. It is only a gross indication if the oil pressure is low, normal or high.
OIL GAUGE PROBLEMS
If the engine is NOT making any unusual noises and seems to be running normally, the oil level on the dipstick is FULL, and you have replaced the oil pressure sending unit but are still getting a low oil pressure reading on the dash gauge, the fault could be in the wiring circuit between the sending unit and gauge, or the gauge itself might be bad.
Check the wiring connections on both ends as well as wiring continuity between the sending unit and gauge. If no wiring faults are found, hook up a pressure gauge directly to the oil pressure port on the engine and check oil pressure with the engine running. If the engine-mounted gauge shows normal oil pressure but the dash gauge is reading low, the problem is a bad dash gauge.
On the other hand, if the engine-mounted pressure gauge reads low and you have done all of the above, chances are the oil pump is worn, or it is not picking up enough oil because of a restriction or blockage in the pickup screen in the bottom of the crankcase.
OIL PUMP PICKUP PROBLEMS
The pickup tube has a screen on the end to prevent large chunks of anything bad that ends up in the crankcase from being sucked into the pump. But we are talking BIG chunks of debris, not normal wear particles or carbon or dust or other microscopic-sized abrasive particles that can cause pump wear over time.

Jim, you are going to have to look at the oil pressure sensor. It may be bad or it may just have a loose wire or bad wire. This sensor picks up the oil pressure and activates your light.

The oil pressure gauge on my 2003 Avalanche reads "0" and activates low oil pressure warning. Oil level is OK and engine does not sound like one with with no oil pressure; AKA no knocks or ticking. The mileage is 50,000 on this vehicle any ideas as I with no gauge I am leary of driving it? Please advise!

Checked oil level first right? May need to replace sensor or have a shop check the pressure with a mechanical gauge.. Best not drive it. If it's lost oil pressure, you could severely damage it by driving with no oil pressure.

If you are lucky , replacing the oil pressure sender unit will solve the problem. Your truck might have perfectly good oil pressure , but a bad sensor. OR you might actually have low oil pressure , which is not good , and will be expensive to fix. Good luck.

Check the oil pressure sensor..

sounds like a bad oil pressure sending unit. or a bad oil pump would have to check with my tech2 & manual oil pressure gauge to diag.